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Time Running Out, Saab May Yet Be Forced to Liquidate

Purchase price might not cover debt.

by on Nov.14, 2011

Even if GM approves the sale of Saab the Chinese deal may not offer enough money to pay off creditors.

Already facing the possibility former owner General Motors will block its sale to a Chinese automotive consortium, fast-fading Saab may be forced into liquidation no matter what because the proposed $181 million purchase price would not cover its outstanding debts.

Saab has been frantically searching for a white knight since last March when unpaid partsmakers began a boycott that quickly shut the company’s headquarters assembly plant down.  With several proposed alternatives on hold the maker late last month announced it would sell its assets to an alliance formed by Chinese dealer network Pang Da and automaker Zhejiang Youngman Lotus.

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But there are growing doubts the deal can go through. And even if the sale wins approval from GM as well as Chinese authorities it may still be blocked by Saab’s creditors.


Saab Wins Chance to Reorganize

Appeals courts accepts plans.

by on Sep.21, 2011

Image By: Len Katz

Saab boss Victor Muller now has 90 days to get the company's finances in order.

A Swedish appeals court has given Saab what amounts to a reprieve, a chance to raise cash and pull its finances into order rather than plunge into a bankruptcy process many believe would result in the closure of the long-troubled automaker.

The decision for the Court of Appeals for Western Sweden reverses an earlier court decision rejecting Saab’s request for a 90-day window in which it would be protected from creditors that include key parts suppliers as well as more than 3,000 Swedish workers.  The reorganization process is somewhat similar to an abbreviated version of the American Chapter 11 bankruptcy filing.

Saab officials have repeatedly said they eventually plan to pay off all of their outstanding debts in full.  But the cash-starved maker is waiting for two proposed Chinese deals to wend their way through that country’s labyrinthine bureaucracy.  In the meantime, Saab has received a $96 million bridge loan it hopes to apply to some of its bills and operational costs until the alliances with China’s largest auto distributor Pangda, and automaker Zhejiang Youngman Lotus Automobile are approved.

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It does not appear likely, however, that the maker will yet be able to re-open the headquarters assembly plant, in Trollhattan, that has been shuttered since suppliers began a boycott in late March.


With $96 Mil in Hand, Saab Hopes to Avoid Bankruptcy

But unpaid workers could push maker into insolvency.

by on Sep.13, 2011

Saab's assembly line has been idled since March due to a supplier boycott.

With a $96 million bridge loan in hand, Saab is desperately hoping to keep itself in business, but it may be too late for the struggling Swedish carmaker, its employees asking the courts to push the brand into bankruptcy.

Saab is asking a Swedish appeals court to reverse last week’s decision by a district judge to reject its reorganization plan – a move that, in Sweden, would give it 90 days to work out a way to pay off its bills.  And it owes a lot of folks money, including not just some of its key suppliers but also 3,700 Swedish employees who weren’t paid last month.

After also experiencing delays in their June and July paychecks, two unions have filed for bankruptcy, something workers are permitted to do in Sweden, though “This is not a situation that any member of Unionen wishes to be in,” Cecilia Fahlberg, chairwoman of one of the two unions, insisted after taking Saab to court.

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The move came hours after Saab found ways to raise $96 million through a complicated deal with Specialty Purpose Vehicle, an apparently newly-formed organization that seems to be linked to one of the Chinese companies, Zhejiang Youngman Lotus Automobile, that has been trying to secure permission to purchase a majority stake in Saab.


Saab Files for Voluntary Reorganization

"We're not trying to pay pennies on the dollar."

by on Sep.07, 2011

Saab hopes to re-open its plants even while under a court-ordered reorganization.

Facing increasing pressures over unpaid bills Swedish Automobile, the parent of cash-starved Saab, has filed for voluntary reorganization under Swedish law.  The move, a last-ditch attempt to buy time while it raises much-needed funds, is an alternative to a bankruptcy filing that might have led to the collapse of the troubled carmaker.

Effectively a self-managed reorganization, the move is aimed at working out plans to pay worker salaries as well as bills owed Saab suppliers and other vendors.  A senior company official said the 90-day process could also see Saab resume production at its headquarters assembly plant in Trollhattan, Sweden.  That factory has been idled since it was struck by a supplier boycott in late March.

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“This gives us some stability” while efforts are underway to raise some desperately needed cash, Tim Colbeck, President and COO of Saab Cars North America, or SCNA said in an interview with  The reorganization, he noted, only affects Swedish Automobile and some of its key subsidiaries in Sweden.  Sales operations in North America and the U.K., among others, are not directly impacted.


Workers Paid, Saab Reveals 3 New Products

Maker outlines plans with new Chinese partners.

by on Jul.05, 2011

Saab hopes to relaunch production at Trollhattan in the coming days.

Still struggling to re-start the assembly plant that has been idled for most of the last three months, Swedish automaker Saab has announced plans to add three new models to its line-up.

The maker has been lining up a coterie of partners, in recent weeks, raising funds to overcome its ongoing cash problems.  A $40 million deal to sell and then lease back its Trollhattan plant, along with a $36 million bridge loan, could resolve its most immediate problems, allowing production to resume sometime in the coming days.

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But even before the Trollhattan plant starts rolling again, Victor Muller, Chairman of Saab and its parent, Swedish Automobile, announced three new products that are either a much-needed plan for the future, or little more than wishful thinking.

“We will now be able to develop a small entry-level Saab, a car that has long been on the top of our wish list,” says a statement from Muller, who noted Saab also wants to add two models bigger than its current offerings.


Saab Lines Up $40 Mil Deal to Pay Down Debt

Maker hoping it can soon re-start idled assembly plant.

by on Jun.28, 2011

Saab's factory could soon be running again - or so the automaker now hopes.

The cash-starved Swedish automaker Saab continues lining up funding that it hopes will permit it to pay off mounting debts and re-start its idled assembly plant.

A day after revealing that an unnamed Chinese company will acquire $18.4 million worth of Saab vehicles, the maker says it has a tentative leaseback deal in place to sell a majority stake in its Saab Automobile Property unit, which owns the Trollhattan plant and additional assets.  The deal, worth an estimated $40 million, could help Saab not only meet the payroll it missed last week but also cover unpaid bills claimed by its parts suppliers.

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Those vendors have been boycotting Saab since March, compounding the company’s already severe financial problems.

The latest deal would transfer a 50.1% stake in Saab Automobile Property to the Swedish real estate company, Hemfosa.  Saab’s parent, Swedish Automobile, would then sign a 15-year agreement to lease the Trollhattan plant and other facilities.  Hemfosa will also have the right to increase its stake in the property company by buying $7 million worth of shares.